Get a free Quote

From CCY
please type the characters you see:
(spam filter)
spam control image

Apply now

Obligation free account and currency commentary btn_apply_for.gif
Browse By Topic

FX News

Most recent FX News:

Read more

Economies of note this week- 24th August

Written by Sam Coxhead on August 24th, 2012.      0 comments

6:30 PM (NZT)
The Australian Economy:
It has been a very interesting week for the Australian economy. The primary focus came from the release of the minutes from the RBA’s previous monetary policy meeting. These minutes have been followed by RBA Governor Steven’s testimony to the Parliamentary Economic Panel. The rhetoric remains familiar from the RBA. Global anxiety around Europe continues. They see the mining investment peaking in the next two years and the Chinese economy has slowed to more sustainable levels. Interestingly the RBA seems somewhat relaxed about the level of the Australian dollar. All of this comes as a mild surprise given the anecdotal evidence that has emerged elsewhere this week. Mining giants BHP and Rio Tinto have stalled around 50 billion worth of investment and Australia’s resources minister Martin Ferguson declared the mining boom over. Given the economy has been carried by mining investment of late, it seems easy to see how lower commodity demand would directly affect the performance of the wider economy. With non-mining exports having been under intense pressure for an extended period, it is not hard to find pressured businesses. The interest rate markets have been relatively unmoved, but the Australian dollar has come under some pressure on a number of pairings. Next week sees Thursdays release of the latest building approvals and private capital expenditure numbers as the focus.
The US Economy:
Like the wider market, it has been an interesting week in the US economy. The economic data has been positive for the most part. Mostly the housing and manufacturing numbers have beaten expectation and the weekly jobless claims numbers remain at a respectable 372k. The big lead for the week has come from the release of the FED’s monetary policy meeting minutes. These were more “dovish” than the market was positioned for. The somewhat stale numbers were downbeat and saw increased chances of further quantitative easing in the coming months. This noise saw the US dollar under pressure across the board for some time. Interestingly, the equity markets struggled to make new ground on the news, a sure sign that their recent increases maybe a little over extended. Subsequent rhetoric from FED member Bullard has pared back expectations of imminent policy easing. This sees the US dollar back in familiar ranges on many pairings. After the durable goods (large ticket items) later on today, the focus moves to the preliminary GDP numbers, and FED Chairman Bernanke’s words at the central bankers symposium next week.
The UK Economy:
It has been a relatively quiet week so far for the UK economy. Public sector borrowing numbers was not as healthy as expected and probably means the easing back of austerity measures is some way off. House prices remain under pressure also, and until this market turns around there is little chance of a substantial consumer led revival of growth. The final GDP numbers later on today round out this week. Next week should continue to see an external focus for the British economy, with only second tier economic data due for release.
The New Zealand Economy:
It has been a very quiet week for economic news in New Zealand. The RBNZ inflation expectations survey saw expectations a touch lower than previously seen. Of note was a lower than expected HSBC Chinese manufacturing numbers. These saw their 10th straight month of contraction and is further confirmation of a slowing in a crucial market for kiwi exporters. Next week is again quiet with only the NBNZ business confidence survey on Wednesday of note. The latest Fonterra auction results will also be watched, but should have limited impact on the price action.
The Canadian Economy:
This week has seen another disappointing retail sales number released in Canada. Adding to the clouded outlook was news that consumer debt has peaked at the highest levels since the recording of this series began in 2004. However the tone was not too down beat from the Bank of Canada (BOC) Governor Carney when he spoke. He noted the Canadian dollar‘s relative strength was being driven by “safe haven” demand. If the US economic numbers continue to stablise at least, the Canadian economy will see flow on effects from that. Next week the focus comes from the release of the monthly growth numbers on Friday. Unfortunately, this numbers effect will be somewhat limited as the central bankers symposium in Jackson Hole will occupy attention.
The Japanese Economy:
It has been a relatively quiet week for data in Japan. The trade numbers were to show a lower deficit than expected, but this is not seen as a good sign as the demand for imports was lower than expected and shows a weakening domestic economy. The Bank of Japan Governor Shirakawa speaks later on today and this address with be closely watched. Next week sees the retail sales number released Thursday, and inflation and industrial production data on Friday. However the central bankers symposium in Jackson Hole will probably garner most attention, limiting the impact of those releases on the price action.
The European Economy:
Last week’s improvement in sentiment for Europe has continued this week for the most part. There has certainly been solid exiting of sold positions in the EURO, and this has helped the EURO outperform for the week so far. In terms of news, the “wall of noise” continues to come ahead of the ECB meeting on the 6th Sep and the subsequent EU leaders summit just after. It seems likely there will be an approach from the Spanish for assistance at some stage, but until the back room negotiations are ironed out, the speculation will continue to fly. The economic data remains almost secondary at the moment, even if this week’s manufacturing numbers come out a little better than the weak expectations. Next week sees the release of business sentiment, inflation, retail sales and employment numbers. Expect the busy schedule coupled with the central bankers symposium in Jackson Hole to increase intraday volatility.